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South America Steps in to Meet Russian Needs

ANALYSIS - The trade war with between Russia and the EU, US, Canada, Australia and Norway that has flared up because of sanctions imposed over the crisis in Ukraine was stepped up this week.

The Russian veterinary authority Rosselkhoznador seized batches of meat, poultry dairy products, eggs and honey that were discovered being imported into the country at border posts between Ukraine and Russia.

And a top level meeting has been taking place between the Russian authorities and Argentine officials with the view to replace meat and food products that have been banned by President Vladimir Putin’s import embargo.

The Russian delegation led by the head of Rosselkhoznadzor, Sergei Dankvert , met with an Argentine trade delegation headed up by First Deputy Minister of Foreign Affairs Carlos Bianchi.

The talks were also attended by Industry Minister Deborah Giorgi, Minister of Agriculture, Animal Industry and Fisheries Carlos Kasamikela, Argentine Ambassador to Russia Pablo Anselmo Tettamanti, representatives of various agencies and embassies. On the Russian side there were senior officials from MFA, Ministry of Economic Development, Industry and Trade, Ministry of Agriculture of Russia and Rosselkhoznadzor.

In the meeting Carlos Bianco told Sergey Dankvert that a special commission was being established in Argentina to explore the possibilities of increasing Argentine-Russian trade.

He said there had been a powerful impetus to the development of bilateral relations caused by the visit to Argentina by the Russian president, Vladimir Putin, as well as their constant support of Argentine President Cristina Kirchner.

Mr Bianco presented Mr Dankvert with a number of proposals to significantly increase the supply of food to make up for the Russian food market volumes of products previously shipped from the European Union and the United States.

The Argentine Minister of Industry Deborah Giorgi said: “We can ensure the supply of a wide variety of Russian products of animal and vegetable origin.

“In particular, Argentina is one of the largest producers of dairy products, the annual production is estimated at $1.7 billion. In a short time the country has become the largest producer of dairy products in Latin America and the seventh largest exporter of milk powder in the world.

“The volume of poultry meat production in Argentina is 700,000 tons per year, which gives the country the ninth largest production in the world in this product group.

“Argentina is also ready to increase exports to Russia of wine. Currently Argentinean wines are exported to 125 countries.”

The minister also said that Argentina is prepared to supply other products such as pasta, chocolate, biscuits and confectionery.

The Argentinean delegation also told the Russian side that given the challenges posed by the Russian President over the development of the domestic agricultural sector, Argentina was ready to supply breeding animals and genetic material of high quality – both embryos and semen.

The Argentine delegation also put forward proposals for the supply of soy beans, fish products and fruit and vegetables as well as supplying pork and finished meat products, as well as high-quality beef.

They said that Argentina is interested in obtaining a quota for poultry meat, previously provided by the European Union.

Sergei Dankvert said that the meeting was of particular importance in the run-up scheduled for this September meeting of the IGC.

He said there were mutual economic interests in developing cooperation and he said that Russia had always had better relationships over the supply of food from Latin America than from either the US or Europe, because subsidies do not distort the market.

Mr Dankvert indicated that there was room for Argentina to take over the cheese market that used to be supplied by the EU. The EU had been supplying 260,000 tonnes of cheese to Russia each year.

He added that there was also a large domestic market demand for milk powder and butter.

He said that the EU had operated a quota system that adjusted production and controlled prices that had made it difficult for countries such as Argentina to compete and this also damaged the interests of Russian producers.

He added that there are also opportunities for Argentine fish and sea food products, especially considering that it will not now be receiving traditional fish such as mackerel, as well as more exotic species such as silver hake.

Russian importers are also interested in Argentine shrimp.

Mr Dankvert said that all the usual veterinary certificates would have to be completed before Argentina could start supplying these products but he said deliveries could be started soon because of the long-term relationship between Rosselkhoznador and the Argentine food safety authority SENASA.

He said that SENASA was very familiar with the rules.

On the prospect of Argentina increasing supplies of poultry meat to Russia, Mr Dankvert said that they could supply more than half the amount that the US was exporting and he said that Rosselkhoznador would be ready as soon as possible to consider applications from Argentina to supply animal products.

He called for a list of companies wanting to supply Russia with products to be drawn up and for all the paper work to be completed quickly.

Away from the meeting with the Argentine delegation, Rosselkhoznador has also received an approach from Brazil putting forward guarantees from companies wanting to supply pork and beef to Russia.